Watch what you say - HMRC is listening

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Accountants are being warned to ask clients more questions about their online trading activity in light of reports that businesses using social media sites could be exposed to greater scrutiny by HMRC.

Mark Lee, former ICAEW Tax Faculty Chairman and now Chairman of the Tax Advice Network, warns that many accountants can expect to see HMRC looking into their clients online trading activity as monitoring social media and blogging sites increasingly becomes an extension of HMRC long term practice of monitoring small ads in local papers and more recently Ebay and other online auction sites.

Lee suggests that the traditional questions that accountants ask clients about new sources of income should be enhanced to help ensure that clients don't overlook any online taxable activities.

"There are two...

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09th Feb 2009 13:44

Since writing about this recently I have received further info
A couple of additional points of which I have become aware:

1 - A Tax barrister tells me that last year he warned a taxpayer who claimed to be non-resident that she should ensure that her contributions to online social networks (eg: facebook) aligned with her claimed residence status. Good advice and a further tax related issue where online social networking could help establish the truth (one way or another)

2 - Someone complained that I was helping HMRC by sharing this information. Even if I was wrong and they are not already doing this (and I believe they are) it doesn't mattter. The fact is that they WILL start to research available data on the web sooner or later. Google and all of the social networks are like history books. If in 2014 either a taxpayer or HMRC wish to prove what was going on in 2008 or 2009, online searches will reveal prima-facie contemporaneous evidence.

Mark Lee
Tax Advice Network

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